Press Digest: Russia preparing law on seizure of foreign assets

Aug 07, 2015

Yelena Temchenko

special to RBTH

Russian courts will have the right to review legal disputes with other countries. Source: Vitaly Belousov / TASS

RBTH presents a selection of views from leading Russian media on international events, featuring reports on a bill allowing Russia to seize foreign state assets in the country, plans to reduce taxes with Hong Kong to attract capital from Asia; and a proposal by human rights activists to reform tests for migrants in Russia.

New bill on confiscation
of foreign state assets is ‘political signal’

The Kommersant business daily reports that Russian
courts will have the right to review legal disputes with foreign countries if
they involve businesses or property related to that country, extending to the
confiscation of state assets. The government has sent the bill to the State
Duma, the lower house of the Russian parliament.

The Foreign Ministry remarked that
the bill's purpose is not to "create countermeasures," but rather
have Russia fulfill its international obligations in giving foreign countries
and their property immunity. The ministry also explains that Russia will take
into consideration "how and to what extent the given foreign country
respects Russia's immunity, its property and assets used for sovereign purposes."

Alexei Panich, partner at Herbert
Smith Freehills, believes that the bill can be interpreted as a "political
signal."

"This single norm, which can be described
as radical, establishes the principle of reciprocity, yet this principle is widely
used in international law," he said.

In Panich's view, the bill was
brought about by the "hostile acts" towards Russia and the
"arrest" of its assets abroad.

Double taxation
with Hong Kong to be avoided under new agreement

The business daily Vedomosti, citing
the Finance Ministry's website dedicated to norms and legal acts, reports that the ministry
is preparing an agreement to avoid double taxation with Hong Kong. Russia
already has such an agreement with China, but Hong Kong has its own fiscal
system, which is why separate agreements must be made with the city.

Hong Kong is currently regarded by the
Finance Ministry as an offshore territory and is included on a blacklist. A
Russian company that pays Hong Kong investors dividends or percentages
withholds 15 and 20 percent taxes, respectively. In Cyprus, for example, thanks
to an similar agreement, the rate is 5 and 0 percent.

"The main thing is to zero the
tax rate by percentage, making fiscal financing cheaper," said an official
from the Finance Ministry, who added that an understanding with China has
already been reached, now the agreement just has to be ratified.

Vedomosti is convinced that the
Finance Ministry's measures are part of the Russian government's policy for
cheapening Asian credit. According to Alexander Zakharov, partner at Paragon
Advice Group, the agreement with Hong Kong, along with others, is one of the
most effective measures and many have been eagerly expecting it.

"In essence, this is a window
onto China,” said Zakharov. It will be more advantageous for Russian companies
to enter the Hong Kong stock exchange. Hong Kong doesn't have any currency
controls and its dollar is tied to the American dollar, which opens lots of
interesting possibilities."

Human rights activists
call for reform of migrant tests

The centrist newspaper Nezavisimaya
Gazeta reports that the Human Rights Council wants to abolish the mandatory
testing of migrants' knowledge of Russian history and legislation. According to
the newspaper, human rights activists are proposing replacing them with
"The Basics of Migration Policy."

Head of the Human Rights Council
Committee on Migration Policy Yevgeny Bobrov, who is participating in the
development of the amendments, says that regardless of test results, the
knowledge that migrants have of Russian history and legislation is next to
zero. The test, according to Bobrov, should be replaced with "The Basics
of Migration Policy," "so that foreigners will understand which
regulations they must abide by in the country and what awaits them if they
don't."